Correlation Between Long An and Thong Nhat
Can any of the company-specific risk be diversified away by investing in both Long An and Thong Nhat at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Long An and Thong Nhat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long An Food and Thong Nhat Rubber, you can compare the effects of market volatilities on Long An and Thong Nhat and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Long An with a short position of Thong Nhat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long An and Thong Nhat.
Diversification Opportunities for Long An and Thong Nhat
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Long and Thong is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Long An Food and Thong Nhat Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thong Nhat Rubber and Long An is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Long An Food are associated (or correlated) with Thong Nhat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thong Nhat Rubber has no effect on the direction of Long An i.e., Long An and Thong Nhat go up and down completely randomly.
Pair Corralation between Long An and Thong Nhat
Assuming the 90 days trading horizon Long An Food is expected to generate 0.5 times more return on investment than Thong Nhat. However, Long An Food is 2.0 times less risky than Thong Nhat. It trades about 0.18 of its potential returns per unit of risk. Thong Nhat Rubber is currently generating about 0.0 per unit of risk. If you would invest 1,880,000 in Long An Food on October 30, 2024 and sell it today you would earn a total of 145,000 from holding Long An Food or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Long An Food vs. Thong Nhat Rubber
Performance |
| Timeline |
| Long An Food |
| Thong Nhat Rubber |
Long An and Thong Nhat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long An and Thong Nhat
The main advantage of trading using opposite Long An and Thong Nhat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long An position performs unexpectedly, Thong Nhat can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thong Nhat will offset losses from the drop in Thong Nhat's long position.| Long An vs. Cotec Construction JSC | Long An vs. Viettel Construction JSC | Long An vs. Fecon Mining JSC | Long An vs. PostTelecommunication Equipment |
| Thong Nhat vs. Vietnam Dairy Products | Thong Nhat vs. Southern Rubber Industry | Thong Nhat vs. Petrolimex Information Technology | Thong Nhat vs. Hanoi Plastics JSC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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